Speed and consequences of venture capitalist post-IPO exit

We examine the determinants of the speed at which venture capitalists exit a firm after its IPO and the influence of their exit on firm value. We hypothesize that the speed of VC exit will be influenced by founder ownership, which both impedes liquidity of a firm's stock and significantly influences its post-exit value. Our results suggest that this is indeed the case. In particular, we find that firms with intermediate levels of founder ownership have the fastest speed of VC exit. Also, such firms experience the largest decline in firm value around the VC exit. Overall, our results suggest that speed and consequences of VC exit are significantly related to a firm's ownership structure.